This thesis proposes a sustainable heritage tourism development approach for large and multifunctional historic cities like Philadelphia. Although Philadelphia is not solely or even largely dependent on tourism, the city nevertheless views heritage tourism as a valuable opportunity to enhance its competitiveness and attract investment. This study explores the challenges in urban heritage management and suggests an approach to integrate community development and heritage tourism development, so as to take advantage of heritage resources for improving quality of urban life while minimizing the negative impact observed in historic cities. One source for this exploration is the successful strategies and practical experience that can be learned from three selected National Heritage Areas (NHA), Baltimore National Heritage Area, Essex National Heritage Area, and Hudson River Valley National Heritage Area. The research method adopted in this study is policy and document analysis on NHA’s best practices, and interviews to understand Philadelphia’s heritage tourism infrastructure. The analysis of Philadelphia is conducted on a city and neighborhood level. After comparing the state of heritage tourism industry in Philadelphia and the heritage tourism development strategies adopted by NHA, the paper concludes that a city-wide management entity with grant-making ability is essential for planning and managing sustainable heritage tourism development in the city. This paper has also discussed heritage tourism in two historic neighborhoods in Philadelphia, Old City and Germantown, representing contrasting development stages and needs. The thesis concludes that the NHA framework provides meaningful directions to a sustainable approach for heritage tourism development that respects visitors and residents, heritage and community resources.